SEOUL, Dec 25 (Reuters) - North Korean leader Kim Jong Un observed construction of a submarine with his daughter, a potential heir, and oversaw the test-firing of long-range surface-to-air missiles, state media reported on Thursday.
Wednesday's missile test near the east coast, aimed at assessing the nuclear-armed country's strategic technology for developing a new type of high-altitude missile, destroyed targets in the air from 200 km (120 miles) away, KCNA said.
South Korea's Joint Chiefs of Staff confirmed the missile test occurred at 5 p.m. (0800 GMT), Yonhap News Agency reported. The South Korean military had been aware of launch preparations and was ready for it, Yonhap said, citing a Joint Chiefs official.
Kim observed construction at another site on an 8,700-ton nuclear-powered submarine capable of launching surface-to-air missiles, KCNA said. It did not identify the location or date of his visit.
The submarine project is part of the ruling party's effort to modernise North Korea's navy, one of five key policies the party is pushing to develop the nation's military capabilities, KCNA said.
A KCNA photo showed Kim at a submarine construction site with his daughter, Ju Ae. Surrounded by other officials, he smiles as the teenager, considered by some analysts as the frontrunner to succeed her father, stands next to him in an indoor facility housing a red vessel.
Kim said North Korea is building multiple attack destroyers and nuclear submarines and working to rapidly accelerate construction so that vessels can be equipped with various weapons, according to KCNA.
The design of the submarine's hull indicates it has been equipped with a nuclear reactor, and the vessel is almost ready to sail, Hong Min, a senior research fellow at the Seoul-based Korea Institute for National Unification, wrote in a report on Thursday.
Kim was quoted as saying the all-out development of nuclear capabilities and modernisation of the navy are essential and inevitable, while "the present world is by no means peaceful".
He said South Korea's plan to develop a nuclear-powered submarine, agreed with Washington, would further inflame tensions on the Korean Peninsula and poses a risk to national security that requires him to take action.
North Korean state media also criticised the recent entry of a U.S. nuclear-powered submarine into a South Korean port, calling it "an act of escalating military tensions" on the Korean Peninsula and in the region.
On Tuesday, the nuclear-powered submarine Greeneville arrived at the Busan port for crew shore leave and the loading of supplies, the South Korean navy said.
North Korea said this week that Japan was showing its intention to possess nuclear weapons, encouraged by South Korea's moves to develop a nuclear submarine.
(Reporting by Heejin Kim; Additional reporting by Joyce Lee; Editing by Chris Reese, Edmund Klamann and William Mallard)
